FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 15(1), PROTECTION OF EMPLOYEES (FIXED-TERM WORK) ACT, 2003 PARTIES : NATIONAL UNIVERSITY OF IRELAND MAYNOOTH (REPRESENTED BY MS. CLARE BRUTON. B.L., INSTRUCTED BY RONAN DALY JERMYN SOLICITORS) - AND - LORRAINE KANE (REPRESENTED BY SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION) DIVISION : Chairman: Ms Jenkinson Employer Member: Ms Cryan Worker Member: Mr Shanahan |
1. Appeal of Rights Commissioner's Decision r-144780-ft-14/RG.
BACKGROUND:
2. The Employer appealed the Rights Commissioner's Decision to the Labour Court. A Labour Court hearing took place on the 23rd April, 2015, 11th June, 2015 & 1st July, 2015. The following is the Labour Court's Decision:-
DETERMINATION:
This is an appeal by the National University of Ireland Maynooth against the Decision of a Rights Commissioner in a claim by Ms Lorraine Kane under the Protection of Employees (Fixed Term Work) Act 2003 (the Act)
The substance of the Complainant’s claim is that she became entitled by operation of law in accordance with the provisions of Section 9(3) of the Act to a contract of indefinite duration having completed more than four years continuous fixed-term employment by 18thNovember 2012 and in the absence of objective grounds justifying the failure to offer her a contract of indefinite duration. The claim was referred to the Rights Commissioner Service on 7thMay 2014.
In line with the normal practice of the Court the parties are referred to as they were at first instance. Accordingly, the National University of Ireland Maynooth is referred to as the Respondent and Ms Kane is referred to as the Complainant.
The facts of the case are not in dispute and can be briefly stated.
The Complainant has been employed by the Respondent on fixed term contracts since 19thNovember 2008. Her contracts were as follows:-
- 1stContract
19thNovember 2008 – 31stMarch 2009 Temporary Executive to the Research Support Officefor the purpose of cover for an employee who was on a period of maternity leave.
2ndContract
1st April 2009 - 30th April 2012Temporary Executive to the Research Support Office. The objective grounds justifying the non-provision of a contract of indefinite duration was due to the provision of specific funding made available for the provision of additional administrative support to the office of vice president for research. A contract of indefinite duration was not provided to allow for external competition for the post.
During the term of this contract and in advance of its expiry, the Complainant successfully applied for a promotional position of Senior Executive Assistant.
3rdContract
15thNovember 2010 – 31stDecember 2012, Senior Executive Assistant in the Commercialisation Office. The objective reason for the non-provision of a contract of indefinite duration was due to"funding is being made available to the university from Enterprise Ireland for a fixed period in respect of the EITTSI[Enterprise Ireland Technology Transfer Strengthening Initiative]scheme"and the contract states that it was contingent on adequate funding being available from Enterprise Ireland.
4thContract
1stJanuary 2013 –31stDecember2016 Temporary Office Manager inthe
Commercialisation Office.The objective grounds stated in the
contract specify that the contract was contingent on adequatefunding from EnterpriseIreland TTS1 2 Project (TechnologyTransferStrengthening Prograrnme-2), BU 415014 and thatthe funding will expire onthe 31st
December 2016.
Complainant received this draft contract, she enquired whether the funding arrangements permitted the application of increments to her and whether she had become entitled to a contract of indefinite duration. The Respondent stated the Complainant did not signthisspecified purposecontractand rather awaited theoutcome of these negotiations on her salary prior to signing a subsequentfixed term contract, inDecember 2013, which was backdated to 1stJanuary 2013, to expire on 31stDecember 2016 (the 4thcontract referred to above).
The Court is satisfied that as the draft specified contract referred to above was not agreed between the parties and was the subject of discussion and negotiations between the parties, no such contract came into existence. It was overtaken by events, a subsequent fixed term contract was entered into as agreed by both parties in December 2013 and backdated to January 2013.
Section 9 Complaint
The Rights Commissioner found that the Complainant’s third contract expired by effluxion of time on 31stDecember 2012 and the fact that she continued in employment beyond that date signified that she was on an implied contract of employment which was not temporally limited and was in law a contract of indefinite duration, The Rights Commissioner declared that her complaint was well founded and that she became entitled to a contract of indefinite duration effective from 1stJanuary 2013.
Mr Paul Henry, SIPTU, on behalf of the Complainant, clarified for the Court that his claim was based on an assertion that the Complainant’s third fixed term contract transmuted to a contract of indefinite duration on 15thNovember 2010 in accordance with Section 9(3) of the Act.
Ms Clare Bruton, B.L., instructed by Ronan Daly Jermyn Solicitors, on behalf of the Respondent, explained that she had come to the Court to move the Respondent’s appeal on the premise that the fixed term contract in issue was the fourth fixed term contract and not the third. She contended that to now claim that the third fixed term contract transmuted to a contract of indefinite duration was outside of the jurisdiction of the Act, by reason of it being outside the six months' time period of the contravention as alleged.
The Court cannot accept the Respondent’s proposition in this regard.In the case ofHSE Dublin North East and Ali Umar FTC/09/28,this Court held as follows:
- The Complainant was not obliged to bring a complaint to a rights commissioner in order to obtain a contract of indefinite duration; he obtained such a contract by virtue of Section 9(3). In so far as there was a contravention of the Complainant’s legal rights, which would arise if the Respondent could not rely on Section 9(4), it was the Respondent’s failure to acknowledge his status as a permanent employee by operation of law.
The Court went on to say that, because there was a“continuing breach”of the Act by way of failure to acknowledge the entitlement to a contract of indefinite duration that it did“not accept that the Complainant’s complaint was presented after the expiry of the time limit prescribed by Section 14(3) of the Act.”
Accordingly, the Court is satisfied that it has jurisdiction to entertain the complaint as presented by the Union under Section 9.
Where, as in the instant case, a fixed term contract is entered into before the expiry of the four year period referred to in Section 9(2), and its duration extends beyond that period, Section 9(3) operates so as to sever the term in that contract providing for its expiry by effluxion of time. The contract is thus converted to one of indefinite duration from the date of its commencement.It is neither for the employer, the Rights Commissioner or this Court, to grant a contract of indefinite duration in these circumstances. The law does so and the relief granted by the Rights Commissioner or this Court is declaratory of the fact that the law has so operated, seeMcArdle and the State LaboratoryLabour Court Determination FTD063 upheld by Laffoy J. High Court on appealMinister for Finance v McArdle[2007] 18 ELR 165. This construction of Section 9(3) of the Act is supported by the plain and ordinary meaning of the language used in the subsection, which provides that the“contract concerned”shall be deemed to be a contract of indefinite duration.Section 9(4) of the Act allows an employer to renew a fixed-term contract in circumstances which would otherwise contravene subsections (1) or (2)where there are objective grounds for so doing.
The third contract under which the Complainant was employed commenced on15thNovember 2010and purported to run for a fixed-term up to31stDecember 2012. That contract,prima facie,contravened Section 9(2) of the Act. Consequently it would have become one of indefinite duration by operation of Section 9(3) unless it is saved by Section 9(4) of the Act. It is, therefore, this contact that must form the focus of the Court’s enquiry in considering if the Complainant’s claim to a contract of indefinite duration can succeed.
As the Respondent came to the Court on 23rdApril 2015 to address the objective grounds why the Complainant’s fourth contract was issued on a fixed term basis and was not in a position to address the reason for the fixed term nature of the third contract, the Court requested it to respond to the Union’s claim as clarified to the Court and to furnish the Court with further submissions on this point. A further two days of hearings were held to finalise the matter.
Summary of the Complainant’s Case
Mr Henry submitted thatin November 2012,the Complainant's contract exceeded the four year threshold, she was employed on successive, and continuous
fixed-term contracts during that time and the work in question was on-going, therefore by the operation of law the contract that she was on at that time should be deemed a contract of indefinite duration.He contended thatthe fact that the Complainant continued in employment with the Respondent after the expiry of her fixed term contract on 31stDecember 2012, indicated that she became employed on an implied contract of employment, which was not temporary, and by operation of law, it became a contract of indefinite duration. In support of this contention, Mr Henry cited the CJEU caseAdeneler and Ors. v Ellinikos Organismos Galaktos[2006] IRLR 716, which held that objective grounds justifying the successive use of fixed term contracts must relate to precise and concrete circumstances characterising the activity to which the fixed-term contract relates.
Mr Henry disputed the Respondent’s contention that the restrictions placed on them due to the Public Sector Moratorium and the Department of Finance policy precluded it from issuing a contract of indefinite duration. He asserted that the Respondent does not have the liberty to avoid its legislative responsibilities and a moratorium does not negate an individual's legal right or entitlement, as held by the Labour Court inThe Arts Council v Ms Eimear HarteFD 131 and inThe National Gallery of Ireland v Mr Michael CoyneFTD1232, where the Court held"it should be noted that an employer cannot justify discrimination ...solely on the grounds that the avoidance of such discrimination would involve increased cost. "
Furthermore Mr Henry citedClare County Council v Ms. Rionach Power, FTD0812, where the Labour Court in considering the expansion of the complainant's duties beyond her original role entitled her to expect a future with the respondent.
The Court was referred toTeagasc v McNamara FTD138where the Court dealt with the issue of external funding:-
- The question of whether the requirement for external funding can give rise to objective justification for the continued use of fixed-term contracts presents difficulties of principle. There are many forms of economic activity in which the viability of employment is dependent on funding generated by individual contracts or projects. That is the case in practically all employments providing professional services and in such industries as construction and civil engineering. That type of activity is dependent on a continuing supply of separate once-off contracts or projects in order to maintain employment. If it were to be held that the use of successive fixed-term contracts could be used indefinitely in such employments so as to protect the employer against the possibility of an insufficient supply of work at some point in the future the effectiveness of the Directive and the Act would be seriously subverted. If, due to economic circumstances or fall-off in demand, there is no longer sufficient work in order to maintain a worker in employment the employer’s remedy lies in making surplus staff redundant. It follows that while the requirement to balance staff levels with available funding is a legitimate objective the continuing use of fixed-term contracts is not always a proportionate and necessary means of achieving that objective.
In response to the submissions made by the Respondent on the objective grounds, Mr Henry stated that commercialisation was a strategic goal of the University in its Strategic Plan 2006-2011. Strategic Goal 4 “Develop research activity such that the University will be clearly recognised as a major research-led liberal arts and science institution by 2011” with an objective to “Develop the University’s policy and infrastructure in supporting the technology transfer and commercialisation of research”. He said that this strategy continued in the University’s Strategic Plan Addendum 2009-2014 under Strategic Goal 4 “developing research programmes and knowledge transfer initiatives to enable NUIM become a national leader and an international centre of excellence in targeted areas of liberal arts and science”.
Two objectives outlined were (i) “to continue to develop research commercialisation opportunities” by the action of “provide on-going support for Commercialisation Office and develop incubation space” and (ii) “continue to support other forms of knowledge transfer to public, private and voluntary interests” by action of “incentivise staff via University policy on consultancy, and through weighting in promotions and procedures and department workload”.
Mr Henry referred to an internal 2009 document, the “NUI Maynooth Institutional Quality Review” Self- Assessment Report, section 3.2.4 which addresses Commercialisation and Technology Transfer. He said that the following points from the report were worth noting:-
- (ii)Half-time funding for a technology transfer executive in life sciences has been provided by the University since 2008
(iii)Final figures for 2009 are projected and resulting from these (technology transfer)outputs there has been a small, but increasing revenue stream to the University. This will grow in future years as a pipeline of commercialisation activity is developed
(iv)An important strategic goal in support of technology transfer and commercialisation has been to establish a University incubator for spin-out companies.
Mr Henry stated that in 2007, as part of the national agenda and under the direction of its parent, Department of Enterprise, Jobs and Innovation, Enterprise Ireland funded the Technology Transfer Strengthening Initiative (TTSI 1) which provided funding to grow the Technology Transfer (TT) functions in Irish universities (2007-2012). TTSI 2 was an expansion programme and the Respondent was successful in becoming a consortium lead with the broader remit of embedding knowledge transfer with funding in place from 2013-2016. The total value of TTSI funding for the Respondent to the end of TTSI 2 is c. €7m. The funding contribution from EI under the TTSI 1 programme was capped at 80% of the total costs of running the TT function in each institution. This funding model was changed for TTSI 2 and is expected to change again for TTSI 3 as needs of the system have evolved.
Mr Henry stated that TTSI 1 ran from 2007-2012 and the initial purpose was to support the development of technology transfer activity in the Irish higher education institute landscape nationally. TTSI 2 runs from 2013-2016 and its main purpose is to embed the broad remit of knowledge transfer which includes technology transfer and business engagement. TTSI 3 is expected to run from 2017-2021. Higher Education Institutes Technology Transfer (TT) directors have been involved in shaping TTSI 3, a 5 year continuation programme, for roll-out in January 2017.
Mr Henry disputed the Respondent’s interpretation of the TTSI’s programmes intent, as presented to the Court, that TTSI is a research project with a defined end date. He submitted that this was not a correct interpretation of the TTSI initiative as it has a deep holistic intent to create an infrastructure to enable publicly funded knowledge transfer from Higher Education Institutes to industry to generate positive societal and economic impact as illustrated by emphasis put on these activities in the University’s Strategic Plan. Since 2005 the Commercialisation Office has worked to introduce and embed the culture of research commercialisation. He said that it is reasonable to expect that a support post would exist in some form or other without TTSI funding as the knowledge transfer activity is inextricably linked to core functions of the University. He said that the Commercialisation Office was provided with an additional annual operations budget over the period of TTSI 1 and TTSI 2 of €30,000 from core funds, therefore it must view it as an essential activity.
Mr Henry contended that in 2010 it was reasonable for the Respondent to expect TTSI funding to continue beyond 2012. At programme inception TTSI 1 had a timeline of almost 6 years (2007-2012) with funding committed for the duration of the programme. He stated that the Respondent’s also had this impression as mentioned in their submission to the Court. This was reinforced by a programme review of the TTSI programme commissioned by Enterprise Ireland in 2009 and a mid-term review took place in 2010 to evaluate its impact. After the 2010 review it was reasonably well known that TTSI 2 would capitalise on the foundations laid down by TTSI 1.
He contended that the Respondent’s expectation was that the knowledge transfer activities would continue beyond December 2012, as it employed an additional member of staff on 1stOctober 2010, that person was offered a 4thconsecutive fixed term contract from 1stOctober 2010 through to 30thSeptember 2013, thereby straddling the TTSI 1 and TTSI 2 programmes.
In any event he contended that if the Court were to find that there was objective justification for the fixed term nature of the contract which the Complainant entered into on 13thNovember 2010, (which is disputed) then Mr Henry submitted that there was no justification for the fixed term nature of the subsequent contract issued to the Complainant.
Summary of the Respondent’s Position
Ms Claire Bruton, B.L. instructed by Ronan Daly Jermyn Solicitors, on behalf of the Respondent submitted that the decision of the Rights Commissioner should be overturned as the Complainant was not entitled to a contract of indefinite duration as she was employed pursuant to a fixed term contract which was objectively justified under Sections 7 and 9(3) of the Act.
The Respondent outlined the objective grounds for the renewal of the Complainant’s contract on a fixed term basis on 15thNovember 2010. Firstly, Ms Bruton pointed out that the Complainant successfully applied for the position of Senior Executive Assistant in the Commercialisation Office in 2010, this was a position which was contingent on funding. The objective grounds specified in the contract were as follows:-
- The offer of the fixed-term contractis justified bythe fact that furthersuitable work of a temporary nature has become
available.The Universityis unableto offeracontract of indefinite duration as thefunding being made byEnterpriseIreland is being madeavailable for a fixed period In the event thatthe funding referred to aboveceases, prior to thetermination ofthis contract,your employment with theUniversity will terminate on four weeks’notice.
She explained that this was the first occasion the Complainant was employed in the Commercialisation Office,her earlier fixed-term contracts being in the research support office which is part of the core and permanent research needs of the Respondent.
At this time the TTSI project was only in place for 2007-2012 which included staff costs prescribed by the agreement and the external funder exercised complete control over the level of funding available and the number of staff engaged to work on the project.This was the first occasion when the Enterprise Ireland TTSI had been established within the Respondent.A vacancy arose in November 2010 by the resignation of the previous post holder. At the time the Complainant took over the role there was no guarantee of any further agreement on funding that the position would continue beyond December 2012.
The reason for the fixed term nature of thecontract was due to the precise funding cessation date and cessation of the project under which the Complainant was engaged which were clear and foreseeable at the date of its conclusion. This funding is finite and fixed externally. She submitted that this position conforms to the dicta of the Labour Court inAthlone Institute of Technology v Holland, FTD1120where it held that the tenure of a fixed term contract is finite and will be discharged by performance at some stage in the future,such that the objective condition must be foreseeable at the time the contract is concluded. This was accepted by the Labour Court inNUI v WurmelFTD1422where funding which was limited and would only last for the duration of the fixed term contract being offered was found to be objectively justified for the purpose of Section 9(3) of the Act.
The specific purpose of TTSI is to bring fresh ideas from research to industry and the Complainant’s position is exclusively based on the funding for this project.She said that theComplainant was fully aware of this position and had accepted the objective justification as contained in the fixed term contract in November 2010. In this regard she relied onNUI Maynooth v BuckleyFTD1015where the Court held that specific funding like the TTSI can be objective justification orreasons for the non- provision of a contract of indefinite duration.
Ms Bruton stated that it is clear from the decisions inRussell v Mount Temple Comprehensive School[2009] IEHC 533 that any objective reasons justifying the furnishing of a contract of indefinite duration for the purposes of Section 9(4) of the Act must be those in existence at the time the contract was entered into. Therefore any contravention crystallised at the entry to the fixed term contract in November 2010. She submitted that as this was the first occasion when Enterprise Ireland Technology Transfer Strengthening Initiative had been established within the University, there was no certainly as to further funding or contracts being renewed with Enterprise Ireland at that time. The grant agreement for 2007 only provided funding until 2012 and there was no guarantee for the continuation of the project or funding. Ms Bruton stated that on that basis the Respondent stood over its submissions in relation to objective justification furnished in respect of the third fixed term contract and argued that this equally applied to the fourth fixed term contract. She said that having regard to the limited duration of the funding and the external nature of it, which was entirely separate from the core funding of the University coupled with the fact that the Complainant was at all times engaged in work entirely connected with the project the use of fixed term contract in those circumstances was entirely justified within the meaning of Sections 7 and 9(4) of the Act and was appropriate in all the circumstances.
Ms Bruton disputed the Complainant’s assertion regarding the possibility of redundancy situation arising and held thatit is an over simplification and mischaracterisation of the position to state that the Complainant’s position may become redundant "due to a fall-off in funded projects".There is a significant difference between the Enterprise Ireland TTSI funding and ordinary government funding relied upon by the Respondent for its core day-to-day activities. TTSI is not part of the permanent features or work of the Respondent.The Commercialisation Office isaimed at commercialisation and exploitation of researchwhich is entirely different to scholarly research within a university.The staff of the Office do not carry out research, its role is to bring to market the intellectual property generated by research.
In response to an argument made by the Complainant regarding the staffing of the Commercialisation Office, Ms Bruton explained that the Director of the Commercialisation Office is paid a salary discharged from the Respondent’s ordinary funding as he is an Officer of the University. He is a permanent employee assigned to the Commercialisation Office and is responsible for all university funding for commercialisation.
Ms Bruton stated that without prejudice to its arguments outlined above therewere objective reasons justifying the renewal of the fixed term contract in January 2013 in accordance with Sections 7 and 9(4) of the Act. TheComplainant’s currentfixed term contractis in place for the period from1stJanuary 2013 - 31stDecember 2016 as a temporary Office Manager inthe Commercialisation Office, thepurpose of which isto supportthecommercialisationand transfer knowledge related to the Respondent'sresearch programmesunder theEnterprise Ireland TTSI2project up to 31stDecember 2016.Thecontract at clause1.3 specificallyrefers tothe contract being contingent on adequatefunding from a specific source:EnterpriseIreland TTSI 2 project, BU 415014.This projectis the TechnologyTransfer
Strengthening Programme-2 and is concerned with theexploitation of intellectual
propertyand commercial development of new technologies developed by the Respondent.This project has a cessation date of 31stDecember 2016 which coincideswith the cessation of the Complainant’s fixed term contract giventhat the funding will equally expire on this date.
Ms Bruton stated that as the Complainant relied on the funding agreement to secure a higher salary for her position on her fourth contract she cannot assert it does not amount to objective justification or does not constitute objective justification. In support of this argument she citedthe test as set down by the Court of Justice inAdeneler v Ellinikos Organismos Galaktosthat there must be
- precise and concrete circumstances characterising a given activity, which are therefore capable of justifying the use of successive fixed term employment contracts. Those circumstances may result, in particular, from the specific nature of the tasks for the performance of which such contracts have been concluded and from the inherent characteristics of those tasks ....
She said that the Complainant only signed the fourth fixed term contract after she had negotiated its terms to her satisfaction and therefore must be deemed to have accepted her continued employment pursuant to a fixed term contract and lack of entitlement to a contract of indefinite duration. The negotiated salary was not aligned with any established pay scale within the Respondent and was personal to the Complainant. She signed the contract in an unconditional and unfettered manner on 16thDecember 2013.
In support of her contention, Ms Bruton referred the Court to thedecision ofCunning v Dublin Institute of Technology[2014] 25 E.L.R. 85 where it was held that the complainant in that case was aware that she had been employed in the absence of a fixed term contract for a period but subsequently signed later
contracts which were fixed term in nature and did do so"without demur"and could not subsequently claim an entitlement to a contract of indefinite duration. In addition she drew attention to decision ofNUI Maynooth v BuckleyFTD1015 where the complainant was held not to be entitled to resile from the objective reasons contained in a fixed term contract which she had executed.
The Respondent stressed the point that it is not aware of whether further funding will be made available post December 2016 or indeed if the Commercialisation Office will continue, it existed prior to EI TTSI funding and might well continue even if TTSI funding is withdrawn. However, if TTSI 2 funding is not continued then the scale of operation of the Commercialisation Office would be unsustainable, and the specific post of Office Manager, which is expressly provided for within the funding agreement for TTSI, would no longer be required or viable.Whilst Enterprise Ireland may launch a successor programme (TTSI 3) there is no confirmation of this. Therefore, Ms Bruton contended that, in all the circumstances, the provision of a fixed term contract for 15thNovember 2010 to 31stDecember 2012 was objectively justified.
The Law
In this case the relevant statutory provisions are to be found in Sections 7, 8 and 9 of the Act. The Act was enacted so as to transpose into domestic law the Framework Agreement on fixed-term work concluded by ETUC, UNICE and CEEP annexed to Directive No. 1999/70/EC of 28 June 1999 of the Council of the then European Communities. Consequently the provisions of the Act must be interpreted and applied so as to achieve the objective pursued by the Framework Agreement.
The purpose of Clause 1 of the Framework Agreement is twofold. Firstly, to improve the quality of fixed-term work by applying the principle of equal treatment to fixed-term workers. Secondly, it is intended to provide a framework for the prevention of abuse arising from the successive use of fixed-term employment contracts.
Section 9(2) of the Act, which is relevant for present purposes, provides:-
- (2) Subject to subsection (4), where after the passing of this Act a fixed-term employee is employed by his or her employer or associated employer on two or more continuous fixed-term contracts and the date of the first such contract is subsequent to the date on which this Act is passed, the aggregate duration of such contracts shall not exceed four years.
Section 9(4) provides that subsection (2) and (3) does not apply were there are objective grounds justifying the renewal.
Section 7 (1) of the Act deals with what constitutes objective grounds for this purpose and provides:
- (1) A ground shall not be regarded as an objective ground for the purposes of any provision of this Part unless it is based on considerations other than the status of the employee concerned as a fixed-term employee and the less favourable treatment which it involves for that employee (which treatment may include the renewal of a fixed-term employee's contract for a further fixed term) is for the purpose of achieving a legitimate objective of the employer and such treatment is appropriate and necessary for that purpose.
Subsection (3) of Section 9 of the Act is of particular significance in the instant case. It provides:
- (3) Where any term of a fixed term contract purports to contravene subsection (1) or (2) that term shall have no effect and the contract concerned shall be deemed to be a contract of indefinite duration.
InMinister for Finance v Una McArdle[2007] 18 ELR 165 Laffoy J quoted with approval the following passage from this Court’s Determination in the case in which the effect s.9(3) was considered:
- That section applies to a situation where an employee is given a renewed fixed-term contract in contravention of subss. (1) or (2). In such a case subsection (3) would operate so as to render void, ab initio, the term of the contract which purports to provide for its expiry by effluxion of time, or the occurrence of an event. Hence, by operation of law the offending term would be severed from the contract thus altering its character from one of definite duration, or fixed term, to one of indefinite duration. However, the remaining terms and conditions of the contract would be unaffected including terms as to pensionability and termination, which, as already observed, would have had to be aligned with those of a comparable permanent employee in accordance with section.
Section 9(4) of the Act allows an employer to renew a fixed-term contract in circumstances which would otherwise contravene subsections (1) or (2)where there are objective grounds for so doing. This provision allows for a derogation from what is an important social right derived from the law of the European Union. It must, therefore, be construed and applied strictly against the person seeking to rely on the subsection (see the dictum of the CJEU to that effect in Case 476/99Lommers v Minister van Landbouw, Natuurbeheer en Visseri[2002] IRLR 430. As in any case in which a party relies on a statutory defence it is for that person to prove the facts necessary to make out the defence.
Findings of the Court
There is a wealth of authority in the jurisprudence of the Court of Justice of the European Union on how the concept of objective justification should be applied. InAdenelerthe CJEU made it clear that the grounds relied upon must be objectively justified by reference to the work actually performed and the circumstances under which it is performed.
Again inAdenelerand in C-380/07Kiriaki Angelidaki and Others v Organismos Nomarkhiaki Aftodiikisi Rethimnis and Dimos Geropotamou[2009] ECR 1-3071, the CJEU drew a distinction between work undertaken for the purpose of meeting the fixed and permanent needs of the employer and work for the purpose of meeting some temporary or transient need. While work in the former category should normally be undertaken on permanent contracts of employment, temporary or fixed-term contracts would normally be suitable for work in the latter category.
In this case the Respondent’s reliance on Section 9(4) is grounded upon the premise that the Complainant’s third contract wasexclusively based on the funding forthe TTSI 1 project.She said that theComplainant was fully aware of this position and had accepted the objective justification as contained in the fixed term contract in November 2010 and cannot now resile from the terms of that contract.
Section 9(4) amounts to a defence under the Act and it is for the Respondent to make out that defence.The essence of the Respondent’s position is that the Complainant was employed in theCommercialisation Office,on a fixed term contractdue to the temporary nature of funding being made available to the Respondent from Enterprise Ireland under theEnterprise Ireland Technology Transfer Strengthening Initiative Scheme"(EITTSI)which was only in place untilthe end of 2012.
However, when questioned about the fixed term contract issued to an employee commencing a position in the Commercialisation Office on 1stOctober 2010 with an expiry date of 30thSeptember 2013, the reason cited by the Respondent for issuing a three year contract which was about to straddle both TTSI 1 and TTSI 2, was that it was anticipated that the funding would continue beyond its deadline date of 31stDecember 2012. In written confirmation to the Court on 6thJuly 2015, the Respondent stated that the employee in question was given a three year contract by the then Vice President of Research, he was paid by the operationsbudget from TTSI 1 (as the University was performing so well it had additional cash and approval from Enterprise Ireland to allow further development of its TT). In its correspondence to the Court the Respondent stated that while it knew that the TTSI 1 would end in December 2012, there was a reasonable expectation that TTSI 2 would happen and thus it decided to continue this employee’s employment directly via staff funding under TTSI 2, which was what actually happened. Enterprise Ireland was consulted in relation to this matter. The Respondent stated that the contract of employment provided to this employee specifically provided for a 30 day termination clause and that the University reserved the right to terminate the contract if Enterprise Ireland reduced or terminated the funding to the Commercialisation Office.
The Court is of the view that it is highly significant that this appointment was made before the Complainant was furnished her third fixed term contract, which was furnished to her on 2ndNovember 2010. The Complainant’s contract stated that the objective reasons for not providing her with a contract of indefinite duration was due to the uncertain nature of the funding which was contingent on adequate funding being available from Enterprise Ireland. The Court finds it difficult to reconcile this position with the fact that in October 2010 the Respondent was so confident of funding after 31stDecember 2012 that it issued a three year contract to another employee working on the same project in the Commercialisation Office. This is particularly so when TTSI 2 project was for a four year period up to 31stDecember 2016, as had the TTSI 1 project.
The Court is satisfied that the Commercialisation Office as provided for in the University’s Strategic Plan to develop its policy and infrastructurehas evolved to become a necessary financial requirement for the University and for Universities in general. It is clear that Enterprise Ireland regard the TTSI work as an integral part of the University, Mr Henry referred to its documentation which makes reference to the requirement that TT strategies must be“in line with and fully integrated into, the institutions development and strategic plans and reflect a high level of institutional support”. He also cited from the Irish Universities Association website which states:-
- Research in the universities is a core activity integrated with Learning & Teaching and Knowledge Transfer. It is essential to understand that these activities are not separate but inextricably linked. Research in the universities improves the quality of education for all students; develops highly educated/trained PhD graduates; creates new knowledge to address economic and social issues.
The Respondent informed the Court that the University owns the intellectual property which is generated by the Commercial Office and any income that emerges from intellectual property rights. The Court notes that the Director of the Commercialisation Office is a permanent member of staff of the University.
The Court notes that the Respondent’s Commercialisation Office is supported by Enterprise Ireland, Knowledge Transfer Ireland, European Regional Development Fund, Ireland’s EU Structural Fund – cofunded by the Irish Government, and therefore forms part of public policy.
Having considered the submissions made the Court is satisfied that the Commercialisation Office is an integral part of the University, it has evolved since its inception in 2005 to a point where research commercialisation is a component of the University’s PhD programme. Furthermore the Commercialisation Office provides entrepreneurial education for undergraduates. It generates substantial revenue for the University which the University is prepared to support both financially and administratively. The Court notes that Complainant was not an employee of Enterprise Ireland but of the University, while Enterprise Ireland provided the funding for her role, she is under the day to day management of the University.
Conclusions of the Court
As previously stated, in considering if the renewal of a fixed-term contract gives rise to a contract of indefinite duration the Court should look no further than the objective grounds relied upon for the contract thatprima faciecontravenes Sections 9(1) or 9(2) of the Act. That appears to be the import of the decision of the High Court inHSE v Umar[2011] 22 ELR 229.
In line withRussellthe Court must examine the objective grounds relied upon at thecommencement of the impugned contract. In this case it is clear that in November 2010 the Respondent was anticipating that the TTSI funding would continue beyond 2012, as it issued a contract to a fellow employee to expire in September 2013 yet the contract issued to the Complainant to expire on 31stDecember 2012 was furnished on the alleged basis that there was no certainty of funds beyond that date. Therefore the Court finds that the objective grounds relied upon were not the real grounds relied upon for the renewal of the Complainant’s appointment on a temporary basis and was not a true reflection of the reality of the situation at the time, thereby rendering the renewal unlawful.
In line withAdenelerandAngelidakithe Court finds that thework undertaken by the Complainant while subject to funding application on occasions was an integral part of the core work of the Respondent and on that basis the Commercialisation Office is a fixed and permanent body within the University for as long as it is capable of attracting funding from its funding bodies.It employed the Complainant as part of that Office and therefore her employment met a fixed and permanent need of the Commercialisation Office and by extension the University and the successive projectsthat it attracted provided the funding from which the Complainant’s employment costs were met.
The decision of Hogan J inHolland v Athlone Institute of Technology[2012] 23 E.L.R 1 makes it clear that even if the Complainant had obtained a contract of indefinite duration by operation of law she could not be placed in a superior position to that of a worker whose status as a permanent employee was never in doubt. Subject to constraints imposed on the Respondent by government policy and subject to there being no unfair selection, an employment relationship can be brought to an end by reason of redundancy.
As the Court held inTeagascthe use of successive fixed-term contracts indefinitely in situations to protect the employer against the possibility of an insufficient supply of work at some point in the future would seriously undermine the effectiveness of the Directive and the Act. If, due to economic circumstances or fall-off in demand, there is no longer sufficient work in order to maintain a worker in employment the employer’s remedy lies in making surplus staff redundant. It follows that while the requirement to balance staff levels with available funding is a legitimate objective the continuing use of fixed-term contracts is not always a proportionate and necessary means of achieving that objective.
For all of the above reasons the Court must hold that the renewal of the Complainant’s appointment for a fixed-term in November 2010 was unlawful by operation of Section 9(4) of the Act and that contract by operation of law became a contract of indefinite duration.
Effect of the Court’s Conclusion
The Court was informed that the Complainant continues to be employed by the Respondent and is now working on terms which are an improvement on those which applied when the November 2010 contract was transmuted into a contract of indefinite duration. Therefore the Complainant has suffered no economic loss and is in an improved situation. The Court notes that the Complainant has been included in the Respondent’s pension scheme since November 2008. For those reasons the Court does not award a compensatory payment in this case.
Determination
It is the Determination of the Court that the Complainant became employed by the Respondent, by operation of Section 9(3) of the Act, on a contract of indefinite duration on 15thNovember 2010 and that she continues to be employed pursuant to that contract. The appeal is disallowed. The decision of the Rights Commissioner is varied and substituted with the terms of this Determination.
Signed on behalf of the Labour Court
Caroline Jenkinson
14th August, 2015______________________
JMcCDeputy Chairman
NOTE
Enquiries concerning this Determination should be addressed to Jonathan McCabe, Court Secretary.